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The Intertemporal Elasticity of Substitution: An Analysis Based on Japanese Data
Author(s) -
OKUBO MASAKATSU
Publication year - 2011
Publication title -
economica
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.532
H-Index - 65
eISSN - 1468-0335
pISSN - 0013-0427
DOI - 10.1111/j.1468-0335.2009.00826.x
Subject(s) - economics , elasticity of substitution , substitution (logic) , econometrics , elasticity (physics) , microeconomics , production (economics) , computer science , thermodynamics , physics , programming language
This paper investigates whether the intertemporal elasticity of substitution (IES) for Japan possesses similar properties to that found for the United States in the literature. As the existing empirical findings are mixed, there is no clear consensus. This paper uses a model with both production and non‐separability between nondurables and durables in order to control for possible factors that cause a bias in the IES. We present the empirical results, demonstrating that the IES is quite similar between the two countries.